The premium paid for cash had reached 4% over deposits, an unthinkably huge charge for liquidity. American economist Abram Piatt Andrew Jr. lamented how such a rate hadn’t walloped Britain once since the frightful Napoleonic Wars. France hadn’t witnessed 4% since its disastrous war with Prussia, and even then, Andrew committed, it happened in just a single instance.
Yet, New York City in October and November of 1907 stared into such a massive liquidity crunch its major businessmen had taken to renting safe deposit boxes and even safes into which to store their liquid money holdings; physically removing whatever cash and coin could be obtained from local banks and placing it elsewhere in caches all around the city.
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